We all hear how the real estate bubble is about to burst. Foreclosures are at the highest levels in history and the news media portrays nothing but doom and gloom. Is this completely true or are there actually safe and lucrative investment opportunities for the savvy investor? The answer is a resounding yes!
Private investors, who earn high profits by investing in real estate, know the market is continually changing. This one factor is what motivates them to always stay ahead of the information curve. While the pessimists are concentrating only on the downside of the market, these investors search for and find new opportunities.
There are always certain niche markets which do not fall within the realm of traditional demographics. In other words, a niche real estate market is driven by unusual circumstances. The informed investor searches for areas which might be experiencing unusual growth caused by economic or political changes. Demand for housing in an area might be high but not nationally recognized. This can hold true in small towns or certain subdivisions within a larger city.
Recently my partner and I visited a small town which is experiencing a growth rate, projected to go from a population of 19,000 to 43,000 within four years, (2011). Supply and demand for housing is an extremely critical issue. A recent political change has caused this extreme growth. In this situation, many private investors are experiencing fantastic profits because they were willing to expend the time and effort to learn more about these initiatives. This is only one example of what is referred to as a niche market.
Experts always state how location is paramount to any real estate investment. This factor has never changed and applies more today than ever before. A niche market can be created by other factors. Major demographic changes can be a significant factor. Consider the movement of the “Baby Boomers.” Beginning in 2007 the baby boomer generation is beginning to retire. Many of them are relocating or purchasing second retirement homes.
As with any sound investment opportunity, you should always know the facts. If you find a niche market, you want to concern yourself with the reputation of the developer and the builder. They are not always the same entity. You will want to pay special attention to the quality of workmanship, completion deadlines, housing demand, competition, and potential profitability.
Is the city or county pro-growth and are there tax incentives or financing available from the city. Many times there are special bonds issued to lower costs of development in order to attract more highly qualified developers with the financial resources to build and complete these projects as quickly as possible. These incentives might allow you to purchase an investment property with a monetary advantage that places you ahead of your competition. Here’s to your profitable investing!
Gerald R. Gallegos, founder, and co-owner of Wealth2020, Inc., obtained a Bachelor of Science degree in Civil Engineering from the University of Denver. Mr. Gallegos has an extensive background in business development, sales training and real estate investing. Throughout his career as a real estate investor, he has perfected and implemented a process that allows investors to purchase properties with little or no money down. He especially enjoys transactions that involve purchasing or selling properties by utilizing a strategy of lease/option contracts. He actively mentors other, new real estate investors to assist them in getting started on the right track.